The US state forfeits $700,000 worth of crypto from dark web dealer “Oxymonster”

36 Year old Gal Vallerius as known as “Oxymonster” in the dark webs has been handed a 20-year prison sentence by US District Judge Robert Scola. Gal was handed this sentence after being involved heavily in the dark web drug hub, Dream market. The French-Israeli citizen was apprehended by police last year while at the World beard and mustache championship in Austin Texas. The 36-year-old was arrested for trafficking Narcotics as well as money laundering and will now begin his prison time in Southern Florida.

Gal made a plea deal where he admitted to selling drugs like heroin, oxycodone, fentanyl, Ritalin and cocaine in exchange for cryptocurrencies. He accepted cryptos like Bitcoin and Bitcoin cash on the dark web. The more than a 100 Bitcoins and 121.95 Bitcoin cash holdings seized from him will be acquired by the state. These holdings amount to over 700,000 dollars which is a huge haul from his illegal activities. Questions have been asked of what will become of this crypto holdings while in the hands of the United States government.

This kind of development is not new since, in 2015, Ross Ulbricht, the creator of Silk road was handed a life sentence and his 144,336 Bitcoins forfeited by the government. At the time of the seizure, Bitcoin was only worth 300 dollars per coin with the government realizing 48 million after auctioning the crypto holdings. At the time, the government got a lot of flack for selling the crypto holdings hastily. Fast forward to 2018 with Gal agreeing to give all his passwords to the state in order for his crypto holdings to be accessed. It remains uncertain if the state will auction his crypto haul just yet or will wait for prices to improve before making the move. It is difficult for crypto analysts to attempt to predict whether the government will make a swift sale just like they did with the case of Ross Ulbricht because of the rarity of these cases.

Interestingly, the government could be in for an era of crypto crime windfalls with the indictment of Gary Davis, an Irishman that pleaded guilty to conspiring to deal in narcotics on the Silk Road under the alias Libertas. Last year, the California district court seized 8 million dollars worth of crypto from Alexandre Cazes, who later committed suicide after being accused of running a dark web ring known as Alphabay. At a time where crypto malpractices are heavily under the microscope by the US justice department, it is unlikely that crypto holdings acquired through the legal system will remain in government hands for long thanks to likely auctions.